China’s stocks take a break after Monday’s rally vaulted market value past US$10 trillion as traders put Covid-19 in rear view mirror

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Hong Kong’s financial district is deserted as the approach of Typhoon Nesat on 29 September 2011 emptied the streets. Photo: SCMP

China’s stocks declined in early trading, taking a respite after rallying by the most in three months, as investors assessed the strength of the economic recovery and the prospect of refresh US stimulus packages. Trading was halted in Hong Kong due to an approach by the tropical storm Nangka.

The Shanghai Composite Index dropped 0.5 per cent to 3,342.18 in early trading on Tuesday. It jumped 2.7 per cent a day earlier on expectations that the recovering in the Asian nation will gather pace and President Xi Jinping will unveil further reform measure in his trip to Shenzhen to mark the 40th anniversary of the economic zone in southern China on the doorsteps of Hong Kong.

China’s stocks top US$10 trillion as economy shakes off 2015 rout, Covid-19

The combined market values of the companies trading on the Shanghai and Shenzhen exchanges rose to US$10.04 trillion on Monday, surpassing the US$10 trillion mark for the first time since 2015. China is the world’s second-largest equity market after the United States.

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China is due to release the September data on exports and imports on Tuesday and the data on third-quarter economic growth will be released on October 19. Other markets in Asia were mixed as the US was still deadlocked over a new round of stimulus measures.

Hong Kong’s securities market has been halted from trading in the morning session after the local weather agency raised the typhoon signal to the third-highest level on early Tuesday, the market operator said in a statement.

The Hong Kong Observatory issued the No 8 northeast gale or storm signal at 5.40am local time, which indicates winds with mean speeds of 63 kilometres per hour to 117 kilometres per hour or more are expected, as Tropical Storm Nangka drew closer to the city.

Typhoon signal No 8 issued as Tropical Storm Nangka nears Hong Kong

The No 8 signal is expected to remain in force for most of Tuesday with some transport services affected. The observatory issued its first No 8 signal this year in August as Typhoon Higos lashed the city.

Under the stock exchange protocols, the morning trading sessions for all markets will be halted if signal remains in place at 9am. The delay will also affect Stock Connect Northbound trading and the derivative markets, Hong Kong Exchanges and Clearing said in a statement. All trading will be cancelled if the signal remains in force at noon.

The Hang Seng Index jumped 2.2 per cent on Monday, the biggest rally since July 21.

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This article originally appeared on the South China Morning Post (www.scmp.com), the leading news media reporting on China and Asia.

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